APR (Annual Percentage Rate)
The yearly cost of borrowing, including fees and interest. This helps you compare different funding options on an equal basis.
Factor Rate
Used in MCAs instead of APR. A factor rate of 1.3 means you pay back $1.30 for every $1 borrowed. To find total repayment, multiply your advance by the factor rate.
Collateral
Assets you pledge to secure a loan. If you default, the lender can claim the collateral. MCAs typically don't require collateral.
Personal Guarantee
A promise that you'll personally repay the debt if your business can't. Most business funding requires some form of personal guarantee.
UCC Filing
A Uniform Commercial Code filing that gives a lender a legal claim on your business assets. It's standard practice and doesn't mean you've done anything wrong.
Working Capital
The money available for day-to-day operations. Working capital = current assets minus current liabilities.
Amortization
How your loan payments are spread over time. In amortized loans, each payment includes both principal and interest.